€70m hike in runway cost not ‘justified’

Transport Minister Shane Ross has said a €70m cost increase for the second parallel runway at Dublin Airport is not “justified”.
€70m hike in runway cost not ‘justified’

In 2014, the cost of the runway development stood at €250m but earlier this year, when the Dublin Airport Authority (DAA) announced the project was going ahead, the price tag had jumped to €320m.

Mr Ross said the DAA had not yet convinced him the increase was justified. He was speaking after Ryanair boss Michael O’Leary yesterday severely criticised the cost escalation.

“Michael O’Leary has a point. I have met the DAA about this. I think the initial cost for that was €250m and it appears it has gone up by about €70m,” said Mr Ross.

“I am not yet satisfied that it is justified. I think we need to be absolutely certain about it before we go ahead. It is a pretty rapid rise and this is a huge development which will be examined carefully.

“I always had an unease about state monopolies, so we have to be very careful as to how they spend our money.”

Work is likely to begin on the new runway by the end of next June after the DAA formally sought bids for the €320m project on Monday.

The airport management issued a tender document inviting bids to design and build the new north runway that the state company announced earlier this year.

DAA hopes to award the contract and issue a commencement notice to the successful bidder in April 2017. This means work could begin by the end of the first half of next year. It is expected to be completed in 2020.

Dublin Airport hosted a record 25m travellers last year and its performance in recent months indicates 2016 was likely to overtake that.

The growth means facilities are under increasing pressure and there is speculation it may have to begin planning for a third terminal in the coming years.

In response to Mr Ross’s comments, a DAA spokesman: “The estimated €250m runway costs outlined in 2014 by the Commission for Aviation Regulation (CAR), which regulates Dublin Airport, were based on 2013 construction prices.

“Earlier this year, the DAA estimated that the overall runway project could cost about €320m. The reasons for the change are a combination of construction price inflation and scope changes. A number of elements such as a new satellite fire station and an engine testing area were not included in the original costing of the project, but are required to meet planning conditions, safety requirements and to maximise the efficiency of the new runway,” the spokesman said.

“As the runway project is currently at tender stage, the market will determine the cost, based on an open EU procurement process. What is planned from DAA’s perspective is a low-cost, highly functional runway, which will cater for all users for decades to come. To put the potential cost of the runway in context, the cost of a new runway in the south-east of England has been estimated at several billion pounds.”

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